PROFIT & RETURN ON EQUITY
Comprehensive income and profit ("Profit") for the third quarter ended
September 30, 2012 increased by +9% to $4,135,328 or $0.241 per share
as compared to $3,807,725 or $0.257 per share for the same period last
year. For the nine months ended September 30, 2012, profit increased by
+17% to $12,683,967 or $0.765 per share as compared to $10,816,059 or
$0.740 per share. Profit for the quarter ended September 30, 2012
exceeded dividends to Shareholders by $103,886.

The third quarter Profit represents an annualized return on average
Shareholders' equity of 9.45% per annum. This return on Shareholders'
equity equates to 837 basis points per annum over the average one year
Government of Canada Treasury bill yield for the quarter and is well in
excess of the Corporation's target yield objective of 400 basis points
per annum over the one year Treasury bill yield.

DIVIDEND OVERVIEW
For the third quarter ended September 30, 2012, the Corporation
distributed $4,031,442 or $0.234 per share versus $3,489,032 or $0.234
per share for the third quarter ended September 30, 2011. For the nine
months ended September 30, 2012, the Corporation distributed
$11,747,406 versus $10,300,321 for the nine months ended September 30,
2011.

INVESTMENT PORTFOLIO HIGHLIGHTS
Details on the Corporation's investment portfolio as at September 30,
2012 are as follows:

Total gross investment portfolio equals $287,415,599, which is a +5%
increase over December 31, 2011.

Conventional first mortgages, being those mortgages with loan to values
less than 75%, comprise 67.1% of our total portfolio, and total
conventional mortgages with loan to values under 75% comprise 81.2% of
our total portfolio.

Non-conventional mortgages total 10.5% of the portfolio.

Related investments total 8.3% of the portfolio.

Approximately 67% of the portfolio matures by September 30, 2013. This
results in a continuously revolving portfolio, allowing management to
assess market conditions.

The average face interest rate on the portfolio is 9.14% per annum.

Regionally, the portfolio is diversified approximately as follows:
Ontario (77.6%), Alberta (15.8%), British Columbia (3.0%), with the
balance (3.6%) being in other provinces.

Investment portfolio breakdown by loan size is as follows:

Amount

Number ofInvestments

%

Total Amount

%

$0-$2,500,000

101

70%

$

80,970,823

28%

$2,500,001-$5,000,000

27

19%

93,124,521

32%

$5,000,001-$7,500,000

10

7%

59,831,073

21%

$7,500,001 +

6

4%

53,489,182

19%

144

100%

$

287,415,599

100%

IMPAIRMENT PROVISION UPDATE
Management has always taken a proactive approach to allowance provision
reserves. This is a prudent approach to protecting our Shareholders'
equity. The impairment provision remains unchanged at $3,180,000 which
represents 1.1% of the gross loan portfolio.

UNRECOGNIZED INCOME COLLECTED
As at September 30, 2012, the Corporation has recorded as a receivable
on its books, banked non-refundable fee income of $512,925, which will
be recognized as income over the term of the corresponding investments.

DIVIDEND AND SHARE PURCHASE PLAN
The Corporation has in place a Dividend Reinvestment Plan (DRIP) and
Share Purchase Plan that is available to its Shareholders. The plans
allows participants to have their monthly cash dividends reinvested in
additional shares at a 2% discount to market and grants participants
the right to purchase, without commission, additional shares, up to a
maximum of $12,000 per annum.

ABOUT THE CORPORATION
The Corporation, through its Mortgage Banker, Firm Capital Corporation,
is a non-bank lender providing residential and commercial short-term
bridge and conventional real estate financing, including construction,
mezzanine and equity investments. The Corporation's investment
objective is the preservation of Shareholders' equity, while providing
Shareholders with a stable stream of monthly dividends from
investments. The Corporation achieves its investment objectives by
pursuing a strategy of growth through investments in selected niche
markets that are under-serviced by large lending institutions. Lending
activities to date continue to develop a diversified mortgage
portfolio, producing a stable return to Shareholders. Full reports of
the financial results of the Corporation for the year are outlined in
the audited financial statements and the related management discussion
and analysis of Firm Capital, available on the SEDAR website at www.sedar.com. In addition, supplemental information is available on Firm Capital's
website at www.firmcapital.com.

Forward-Looking Statements
This news release contains forward-looking statements within the meaning
of applicable securities laws including, among others, statements
concerning our objectives, our strategies to achieve those objectives,
our performance, our mortgage portfolio and our distributions, as well
as statements with respect to management's beliefs, estimates, and
intentions, and similar statements concerning anticipated future
events, results, circumstances, performance or expectations that are
not historical facts. Forward-looking statements generally can be
identified by the use of forward-looking terminology such as "outlook",
"objective", "may", "will", "expect", "intent", "estimate",
"anticipate", "believe", "should", "plans" or "continue" or similar
expressions suggesting future outcomes or events. Such forward-looking
statements reflect management's current beliefs and are based on
information currently available to management.

These statements are not guarantees of future performance and are based
on our estimates and assumptions that are subject to risks and
uncertainties, including those described in our Annual Information Form
under "Risk Factors" (a copy of which can be obtained at
www.sedar.com), which could cause our actual results and performance to
differ materially from the forward-looking statements contained in this
circular. Those risks and uncertainties include, among others, risks
associated with mortgage lending, dependence on the Corporation's
manager and mortgage banker, competition for mortgage lending, real
estate values, interest rate fluctuations, environmental matters,
shareholder liability and the introduction of new tax rules. Material
factors or assumptions that were applied in drawing a conclusion or
making an estimate set out in the forward-looking information include,
among others, that the Corporation is able to invest in mortgages at
rates consistent with rates historically achieved; adequate mortgage
investment opportunities are presented to the Corporation; and adequate
bank indebtedness and bank loans are available to the Corporation.
Although the forward-looking information continued in this new release
is based upon what management believes are reasonable assumptions,
there can be no assurance that actual results and performance will be
consistent with these forward-looking statements.

All forward-looking statements in this news release are qualified by
these cautionary statements. Except as required by applicable law, the
Corporation undertakes no obligation to publicly update or revise any
forward-looking statement, whether as a result of new information,
future events or otherwise.

Unaudited Condensed Interim Financial Statements of

FIRM CAPITAL MORTGAGE INVESTMENT CORPORATION

For the Three and Nine Months Ended September 30, 2012 and 2011
(unaudited)

NOTICE UNDER NATIONAL INSTRUMENT 51-102

National Instrument 51-102: Continuous Disclosure Requirements requires
that these interim financial statements be accompanied by this notice
which indicates that these financial statements have not been reviewed
by the auditors of Firm Capital Mortgage Investment Corporation.

Firm Capital Mortgage Investment Corporation (the "Corporation"),
through its mortgage banker, Firm Capital Corporation, in a non-bank
lender providing residential and commercial short-term bridge and
conventional real estate financing, including construction, mezzanine
and equity investments. The shares of the Corporation are listed on
the Toronto Stock Exchange under the symbol "FC". The Corporation is a
Canadian mortgage investment corporation and the registered office of
the Corporation is 1244 Caledonia Road, Toronto, Ontario, M6A 2X5. FC
Treasury Management Inc. is the Corporation's manager.

1. Organization of the Corporation:

On November 30, 2010, Firm Capital Mortgage Investment Trust (the
"Trust") entered into a plan of arrangement ("Reorganization"), whereby
the Trust was converted from an income trust structure into the public
corporation, Firm Capital Mortgage Investment Corporation, effective
January 1, 2011. The Corporation was incorporated pursuant to the Laws
of the Province of Ontario on October 22, 2010 for the purposes of
participating in the Reorganization.

Pursuant to the Reorganization, units of the Trust were exchanged on a
one-for-one basis for common shares of the Corporation. Holders of
units therefore became the sole shareholders of the Corporation
effective January 1, 2011.

As part of the Reorganization, the Trust was wound up and its assets
were distributed to the Corporation. The Reorganization was treated as
a change in business form rather than a change in control, and
therefore, has been accounted for as a continuity of interest. The
carrying amounts of assets, liabilities, and shareholders' equity in
the financial statements of the Trust immediately prior to the
Reorganization were the same as the carrying values of the Corporation
immediately following the Reorganization.

2. Basis of presentation:

The unaudited condensed interim financial statements of the Corporation
have been prepared by management in accordance with International
Accounting Standards ("IAS") 34, Interim Financial Reporting. The
preparation of these unaudited condensed interim financial statements
is based on accounting policies and practices in accordance with
International Financial Reporting Standards ("IFRS"). The accompanying
unaudited condensed interim financial statements should be read in
conjunction with the notes to the Corporation's audited condensed
financial statements for the year ended December 31, 2011, since they
do not contain all disclosures required by IFRS for annual financial
statements. These unaudited condensed interim financial statements
reflect all normal and recurring adjustments which are, in the opinion
of management, necessary for a fair presentation of the respective
interim periods presented.

These unaudited condensed interim financial statements have been
prepared on the historical cost basis, except for financial instruments
classified as fair value through profit or loss, which are measured at
fair value. These financial statements are presented in Canadian
dollars, which is the Corporation's functional currency.

3. Significant accounting policies:

The accounting policies applied by the Corporation in these unaudited
condensed interim financial statements are the same as those applied by
the Corporation in its financial statements for the year ended December
31, 2011 and accordingly should be read in conjunction with them.

4. Investment portfolio:

The following is a breakdown of the investment portfolio as at September
30, 2012 and December 31, 2011:

Sep. 30, 2012

Dec. 31, 2011

Conventional first mortgages

$ 192,766,981

67.06%

$ 188,083,658

68.64%

Conventional non-first mortgages

40,626,786

14.14%

41,927,607

15.30%

Related investments

23,884,669

8.31%

19,958,571

7.28%

Non-conventional mortgages

30,137,163

10.49%

24,058,755

8.78%

Total investments (at cost)

$ 287,415,599

100.00%

$ 274,028,591

100.00%

Impairment provision

(3,180,000)

(2,980,000)

Investment portfolio

$ 284,235,599

$ 271,048,591

Conventional first mortgages are loans secured by a first priority
mortgage charge with loan to values not exceeding 75%. Conventional
non-first mortgages are loans with mortgage charges not registered in
first priority with loan to values not exceeding 75%. Related
investments are loans that may not necessarily be secured by mortgage
charge security. Non-conventional mortgages are loans that in some
cases have loan to values that exceed or may exceed 75% and are the
investments that are the source of all special profit participations
earned by the Corporation.

Investment portfolio is stated at amortized cost. The impairment loss
in the amount of $3,180,000 as at September 30, 2012 represents the
total amount of management's estimate of the shortfall between the
investment principal balances and the estimated recoverable amount from
the collateral securing the loans.

The loans comprising the Investment portfolio bear interest at the
weighted average rate of 9.14% per annum (December 31, 2011 - 9.06% per
annum) and mature between 2012 and 2016.

The un-advanced funds under the existing investment portfolio (which are
commitments of the Corporation) amounted to $51,850,141 as at September
30, 2012 (December 31, 2011 - $30,845,331).

Principal repayments based on contractual maturity dates are as follows:

Balance of 2012

$65,911,549

2013

140,913,747

2014

71,299,965

2015

9,093,038

2016

197,300

$287,415,599

Borrowers who have open loans have the option to repay principal at any
time prior to the maturity date.

5. Convertible debentures:

Nine Months Ended

Nine Months Ended

September 30, 2012

September 30, 2011

Total Debentures

Total Debentures

Principal balance, beginning of period

$69,134,395

$53,628,903

Issued

18,848,730

24,200,834

Conversions of debentures to shares

(4,977,000)

(5,798,000)

Adjustment to fair value of conversion option

110,507

128,928

Implicit interest rate in excess of coupon rate

185,890

66,253

Deferred finance cost amortization

488,811

307,899

Principal balance, end of period

$83,791,333

$72,534,817

The breakdown of the Total Debentures for the nine months ended
September 30, 2012 presented in the above table is as follows:

6.00%

5.75%

5.40%

5.25%

Convertible

Convertible

Convertible

Convertible

Debenture

Debenture

Debenture

Debenture

TOTAL

Principal balance, beginning of period

$15,225,091

$30,021,130

$23,888,174

$ -

$69,134,395

Issued

-

-

-

18,848,730

18,848,730

Conversions

(4,977,000)

-

-

-

(4,977,000)

Adjustment to fair value of conversion option

110,507

-

-

-

110,507

Implicit interest rate in excess of coupon rate

45,927

21,692

75,658

42,613

185,890

Deferred finance cost amortization

128,358

158,726

130,213

71,514

488,811

Principal balance, end of period

$10,532,883

$30,201,548

$24,094,045

$18,962,857

$83,791,333

Maturity Date

Jun 30, 2013

Oct 31, 2017

Feb 28, 2019

Mar 31, 2019

The breakdown of the Total Debentures for the year ended December 31,
2011 is as follows:

6.00%

5.75%

5.40%

Convertible

Convertible

Convertible

Debenture

Debenture

Debenture

TOTAL

Principal balance, beginning of year

$23,886,736

$29,742,067

$ -

$53,628,803

Issued

-

-

23,822,547

$23,822,547

Conversions

(9,093,000)

-

-

(9,093,000)

Adjustment to fair value of conversion option

202,368

-

-

202,368

Implicit interest rate in excess of coupon rate

57,998

30,117

3,372

91,487

Deferred finance cost amortization

170,989

248,946

62,255

482,190

Principal balance, end of year

$15,225,091

$30,021,130

$23,888,174

$69,134,395

In 2009, $536,000 of the 6.00% convertible debentures were converted by
the debenture holders to 45,617 shares of the Corporation. In 2010,
$20,000 of the 6.00% convertible debentures were converted by the
debenture holders to 1,702 shares of the Corporation. In 2011,
$9,093,000 of the 6.00% convertible debentures were converted by the
debenture holders to 773,861 shares of the Corporation. In 2012,
$4,977,000 of the 6.00% convertible debentures were converted by the
debenture holders to 423,561 shares of the Corporation.

In the first quarter of 2012, the Corporation completed a public
offering of 20,485, 5.25% convertible unsecured subordinated debentures
at a price of $1,000 per debenture for gross proceeds of $20,485,000.
The debentures mature on March 31, 2019 and interest is paid
semi-annually on March 31 and September 30. The debentures are
convertible at the option of the holder at any time prior to the
maturity date at a conversion price of $14.80. The debentures may not
be redeemed by the Corporation prior to March 31, 2015. On or after
March 31, 2015, but prior to March 31, 2016, the debentures are
redeemable at a price equal to the principal, plus accrued interest, at
the Corporation's option on not more than 60 days' and not less than 30
days' notice, provided that the weighted average trading price of the
shares on the Toronto Stock Exchange for the 20 consecutive trading
days ending five trading days preceding the date on which the notice of
redemption is given is not less than 125% of the conversion price. On
or after March 31, 2016 and prior to the maturity date, the debentures
are redeemable at a price equal to the principal amount plus accrued
interest, at the Corporation's option on not more than 60 days' and not
less than 30 days' prior notice. On redemption or at maturity, the
Corporation may, at its option, elect to satisfy its obligation to pay
all or a portion of the principal of the debenture by issuing that
number of shares of the Corporation obtained by dividing the principal
amount being repaid by 95% of the weighted average trading price of the
shares for the 20 consecutive trading days ending on the fifth trading
day preceding the redemption or maturity date.

The convertible debentures were allocated into liability and equity
components on the date of issuance as follows:

Liability

$19,795,000

Equity

690,000

Principal

$20,485,000

As at September 30, 2012, debentures payable bear interest at the
weighted average effective rate of 5.56% per annum (December 31, 2011 -
5.68% per annum).

Notwithstanding the carrying value of the convertible debentures, the
principal balance outstanding to the debenture holders is $88,040,000
as at September 30, 2012.

6. Shareholders' equity:

On January 1, 2011, all outstanding units were exchanged on a
one-for-one basis for common shares of the Corporation, as described in
Note 1.

The beneficial interests in the Corporation are represented by a single
class of shares which are unlimited in number. Each share carries a
single vote at any meeting of shareholders and carries the right to
participate pro-rata in any dividends.

(a) Shares issued and outstanding:

The following shares were issued and outstanding as at September 30,
2012:

# of shares

Amount

Balance, beginning of period

15,213,018

$147,200,878

New shares from conversion of debentures

423,561

4,977,000

New shares from public offering

1,541,000

20,726,450

New shares issued during the period under Dividend Reinvestment Plan

97,074

1,262,598

Offering costs

-

(1,014,560)

Balance, end of period

17,274,653

$173,152,366

The following shares were issued and outstanding as at December 31,
2011:

# of shares

Amount

Balance, beginning of year

14,377,333

$137,343,502

New shares from conversion of debentures

773,861

9,093,000

New shares issued during the period under the Dividend Reinvestment Plan

61,824

764,376

Balance, end of year

15,213,018

$147,200,878

In the first quarter of 2012, the Corporation completed a public
offering of 1,541,000 shares at $13.45 per share.

(b) Incentive option plan:

As at September 30, 2012, no options are outstanding (December 31, 2011
- nil).

(c) Dividend reinvestment plan and direct share purchase plan:

The Corporation has a dividend reinvestment plan and direct share
purchase plan for its shareholders which allows participants to
reinvest their monthly cash dividends in additional Corporation shares
at a share price equivalent to the weighted average price of shares for
the preceding five-day period.

7. Per share amounts:

(a) Profit per share calculation:

The following table reconcile the numerators and denominators of the
basic and diluted profit per share for the three and nine months ended
September 30, 2012 and 2011.

Basic profit per share calculation:

Three Months Ended

Nine Months Ended

Sep 30, 2012

Sep 30, 2011

Sep 30, 2012

Sep 30, 2011

Numerator for basic profit per share:

Profit

$4,135,328

$3,807,725

$12,683,967

$10,816,059

Denominator for basic profit per share:

Weighted average shares

17,187,465

14,840,699

16,578,057

14,625,573

Basic profit per share

$0.241

$0.257

$0.765

$0.740

Diluted profit per share calculation:

Three months ended

Nine months ended

Sep 30, 2012

Sep 30, 2011

Sep 30, 2012

Sep 30, 2011

Numerator for diluted profit per share:

Profit:

$4,135,328

$3,807,725

$12,683,967

$10,816,059

Interest on convertible debentures

1,484,778

1,027,681

4,208,940

2,848,172

Net profit for diluted profit per share

$5,620,106

$4,835,406

$16,892,907

$13,664,231

Denominator for diluted profit per share:

Weighted average shares

17,187,465

14,840,699

16,578,057

14,625,573

Net shares that would be issued:

Assuming debentures are converted

6,038,151

4,355,606

6,038,151

4,056,279

Diluted weighted average shares

23,225,616

19,196,305

22,616,208

18,681,852

Diluted profit per share

$0.241

$0.252

$0.747

$0.731

8. Dividends:

The Corporation intends to make dividend payments to the shareholders on
a monthly basis on or about the 15th day of each month. The operating
policies of the Corporation set out that the Corporation intends to
distribute to shareholders within 90 days after the year end at least
100% of the net income of the Corporation determined in accordance with
the Income Tax Act (Canada), subject to certain adjustments.

For the nine months ended September 30, 2012, the Corporation recorded
dividends of $11,747,406 (2011 - $10,300,321) to its shareholders.
Dividends were $0.702 per share (2011 - $0.702 per share).

9. Related party transactions and balances:

Transactions with related parties are in the normal course of business
and are recorded at the exchange amount which is the amount of
consideration established and agreed to by the related parties, and are
measured at fair value.

The Corporation's Manager (a company controlled by some of the
directors) receives an allocation of interest, referred to as
Corporation Manager spread interest, calculated at 0.75% per annum of
the Corporation's daily outstanding performing investment balances. For
the nine months ended September 30, 2012, this amount was $1,603,111
(2011 - $1,255,165), and for the three-month period ending September
30, 2012 this amount was $514,866 (2011 - $465,237). Included in
accounts payable and accrued liabilities at September 30, 2012 are
amounts payable to the Corporation's Manager of $149,727 (December 31,
2011 - $204,988).

The total directors' fee paid for the nine months ended September 30,
2012 was $137,250 (2011 - $137,250). The listing of the members of the
board of directors is shown in the annual report. The key management
personnel are also directors of the Corporation and receive
compensation from the Corporation Manager.

The Mortgage Banker (a company controlled by a director) receives
certain fees from the borrowers as follows: loan servicing fees equal
to 0.10% per annum on the principal amount of each of the Corporation's
investments; 75% of all the commitment and renewal fees generated from
the Corporation's investments; and 25% of all the special profit income
generated from the non-conventional investments after the Corporation
has yielded a 10% per annum return on its investments. Interest and
fee income is net of the loan servicing fees paid to the Mortgage
Banker of approximately $206,000 for the nine months ended September
30, 2012 (2011 - $167,000). The Mortgage Banker also retains all
overnight float interest and incidental fees and charges payable by
borrowers on the Corporation's investments. The Corporation's share of
commitment and renewal fees is recorded in income and for the nine
months ended September 30, 2012 was $761,519 (2011 - $691,579) and for
the three month period ended September 30, 2012 was $268,285 (2011 -
$295,867) and applicable special profit income for the nine months
ended September 30, 2012 was $940,849 (2011 - $218,307) and for the
three month period ended September 30, 2012 was $259,488 (2011 -
$67,932).

The Corporation's Management Agreement and Mortgage Banking Agreement
contains provisions for the payment and termination fees to the
Corporation Manager and Mortgage Banker in the event that the
respective agreements are either terminated or not renewed.

Several of the Corporation's investments are shared with other investors
of the Mortgage Banker, which may include members of management of the
Mortgage Banker and/or Officers or directors of the Corporation. The
Corporation ranks equally with other members of the syndicate as to
receipt of principal and income.

Mortgages totalling $13,800,000 (December 31, 2011 - $15,560,000) are
outstanding to borrowers controlled by an independent director of the
Corporation. Each investment is dealt with in accordance with the
Corporation's existing investment and operating policies.

The Corporation is involved in certain litigation arising out of the
ordinary course of investing in loans. Although such matters cannot be
predicted with certainty, management believes the claims are without
merit and does not consider the Corporation's exposure to such
litigation to have an impact on these unaudited condensed interim
financial statements.

12. Fair value of financial instruments:

The fair values of amounts receivable, bank indebtedness, accounts
payable and accrued liabilities and shareholder dividend payable
approximate their carrying values due to their short-term maturities.

The fair value of investment portfolio approximates its carrying value
as the majority of the loans are repayable in full at any time without
penalty.

The fair values of loans payable approximate their carrying values due
to the fact that the majority of the loans are: (i) repayable in full,
at any time upon the borrower under the underlying loan that secures
the loan payable repaying their loan without penalty, and (ii) have
floating interest rates linked to bank prime.

The fair value of convertible debentures, including their conversion
option, has been determined based on the closing price of the
debentures of the Corporation on the Toronto Stock Exchange for the
respective date. The fair value has been estimated at September 30,
2012 to be $89,780,955 (2011 - $73,655,835). This is a level 1 input
which is based on a quoted price in an active market.